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How healthy is the auto loan industry? Q3 data show lenders reduce loans to subprime consumers and increase loans to prime consumers

Published: December 1, 2016 by Melinda Zabritski

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This quarter’s State of the Automotive Finance Market report provides a stark reality check for anyone making doomsday predictions about a subprime bubble in the auto industry. While delinquent payments are slightly on the rise, data from the report show that the auto lending industry has responded by reining in loans to subprime consumers.

Results found that newly originated loans to prime borrowers jumped two percent to encompass nearly 60 percent of auto loans financed in Q3 2016. Moreover, loans extended to consumers in the subprime tier fell 4.5 percent from the previous year, and loans to deep-subprime consumers dropped 2.8 percent to the lowest level on record since 2008. When considering delinquent payments, there’s no extreme cause for concern either as overall 30-day delinquencies remained flat from the previous quarter, and overall 60-day delinquencies showed a slight uptick to 0.74 percent in Q3 2016 (0.67 percent in Q3 2015).

The move in Q3 to more prime and super prime customers pushed the average loan scores higher for the first time in four years. For new vehicle loans, the average credit score climbed two points to 712 in Q3 2016, marking the first time average credit scores for new vehicle loans rose since hitting a record high of 723 in Q2 2012. For used-vehicle loans, the average credit score jumped five points from 650 in Q3 2015 to 655 in Q 2016.

More notable news in the auto loan market – there was a slight increase in interest rates. Interest rates for the average new vehicle loan went from 4.63 percent in Q3 2015 to 4.69 percent in Q3 2016. This increase played a key role in driving more market share to the credit unions. Credit unions grew their share of the total automotive loan market from 17.6 percent in Q3 2015 to 19.6 percent in Q3 2016. For new vehicle loans specifically, credit unions grew their share by 22 percent, going from 9.9 percent in Q3 2015 to 12 percent in Q3 2016.

Other key findings from the Q3 2016 report:

  • Total open automotive loan balances reached a record high of $1.055 billion.
  • Used vehicle loan amounts reached a record high of $19,227, up by $361.
  • The average new vehicle loan amount jumped to $30,022 from $28,936.
  • Share of new vehicle leasing jumped to 29.49 percent from 26.93 percent.
  • The average monthly payment for a new vehicle loan was $495, up from $482.
  • The average new vehicle lease payment was $405, up from $398.
  • The average monthly payment for a used vehicle loan was $362, up from $360.
  • The average loan term for a new vehicle was 68 months.

To see the full report results, or to download the webinar and presentation, visit https://www.experian.com/automotive/auto-data.html

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Published: September 5, 2025 by Melinda Zabritski

Amid interest rates leveling out and some lenders reassessing go-to-market strategies, the automotive finance landscape is experiencing notable shifts in market share. According to Experian’s State of the Automotive Finance Market Report: Q1 2025, banks recouped some of their total finance market share for the first time in several years, reaching 26.6% during the quarter, up from 24.8% a year ago. On the other hand, captives’ total market share declined from 31.3% to 29.8% year-over-year and credit unions experienced a modest increase from 20.2% to 20.6%. Despite the overall market share shifts, captives continue to lead in new vehicle financing at 57.1% in Q1 2025, although down from 62.1% the year prior. Meanwhile, banks increased to 24.1% this quarter, from 20.4% in Q1 2024 and credit unions went from 9.6% to 10.9% during the same period. On the used side, banks and credit unions were grouped much closer together. Banks led the way with 28.4% of the used finance market in Q1 2025, up from 27.9% last year, while credit unions went from 27.7% to 28.2% year-over-year and captives declined from 8.5% to 7.4%. As market share movement continues to be a valuable indicator of shifting strategies and consumer behavior, it’s important for automotive professionals to keep a close eye on these shifts to uncover new opportunities while looking for ways to stay ahead of the rapidly evolving industry. Breaking down the latest finance trends Data in the first quarter of 2025 shows the automotive finance market continues to stabilize as automotive professionals gain clearer visibility into lender behavior and consumer demand. For example, the average loan amount for a new vehicle increased $1,110 year-over-year to $41,720 in Q1 2025. However, the average interest rate dropped from 6.9% to 6.7%, and the average monthly payment went from $737 last year to $745 this quarter. For used vehicles, the average loan amount saw a slight uptick of $90 year-over-year, reaching $26,144 this quarter. Meanwhile, the average interest rate declined from 12.4% last year to 11.9% this quarter and the average monthly payment trended lower at $521, from $524 in Q1 2024. Monitoring and leveraging market share shifts and financing trends can support strategic planning while empowering automotive professionals to anticipate consumer purchasing patterns and tailor conversations more effectively to meet buyers where they are during their car buying journey. To learn more about automotive finance trends, view the full State of the Automotive Finance Market: Q1 2025 presentation on demand.

Published: June 5, 2025 by Melinda Zabritski

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Published: March 6, 2025 by Melinda Zabritski

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